|Home > Middle East News|
|Gulf stocks hit amid global crisis|
Article Date: October 06, 2008
stock markets have dropped sharply due to uncertainty surrounding the
current global financial crisis.
All but one of the six markets in the energy-rich region re-opened on Sunday after being closed for a week for the Muslim Eid al-Fitr celebrations.
Dubai Financial Market dropped by 6.86 per cent to close on 3,844.27 points, its lowest finish in about 18 months. It has dropped 35.2 per cent this year.
An 11.1 per cent slump in the real estate sector depreciated the market, with Emaar, the market leader and construction giant, lost 12.3 per cent.
Emaar's loss was its biggest single-day loss in about eight years.
The Abu Dhabi Securities Exchange, the other market in the United Arab Emirates (UAE), fell 4.7 per cent to 3,769.84 points.
The drop was also due to a fall in the real estate sector, which reduced by nine per cent.
As well as the real estate falls, the two markets were said by analysts to be significantly affected by the reported withdrawal of billions of dollars by foreign investors because of the global credit crunch.
In Qatar, the Doha Securities Market ended the day down seven per cent at 8,664.46 points, while Oman's Muscat Securities Market fell 2.8 per cent.
Kuwait Stock Exchange, the second largest in the Arab world, lost 3.6 per cent to close on 12,379.00 points, sliding below the 2007 close for only the second time this year.
Hashem Ahelbarra, Al Jazeera's correspondent at the Doha Securities Market, said that the US' $700bn economic bailout plan had failed to bolster confidence in the Gulf as yet.
"Here morale is very low among investors, who are desperate for an exit strategy," he said.
Nadine Wehbe, a market analyst with Orion Brokers in Dubai, told Al Jazeera: "We are still going strong in this part of the world. A lot of commercial banking is still up and strong. A lot of mortgages are still up and strong."
Wehbe said that the principle cause of the global financial crisis was the sub-prime (high-risk) mortgage market and that the Gulf region had a relatively low number of sub-prime mortgages, at 60 to 65 per cent of house loans.
She said that the real estate sector in the UAE would return to a regular business cycle, unlike the US real estate market.The stock market in Saudi Arabia will reopen on Monday.
Source: Al Jazeera and agencies